Founder’s Son, Investors Offer $1.34 Billion Cash for Taft Broadcasting Co.

A scion of the prominent Taft family of Ohio and a Rhode Island investment firm Friday offered $1.34 billion in cash for Taft Broadcasting Co., a major operator of TV and radio stations and producer of movies and TV programs.

Taft has recently been threatened with liquidation amid deepening losses and shareholder dissension.

Dudley S. Taft, vice chairman and son of founder Hulbert Taft Jr., said he and Narragansett Capital Inc., of Providence, wanted to buy the concern “to preserve the company and its ties to Cincinnati,” where it has headquarters.

Takeover entrepreneurs Robert M. Bass and Carl H. Lindner own large stakes in Taft Broadcasting and have recently discussed selling part or all of the company, or liquidating it. Taft, 42, was forced out of the chief executive’s post last July, and more recently has contemplated resigning his vice chairman’s post because of his unhappiness with some investors’ desire to sell off or drastically reorganize the company.

The $145-a-share offer drove the price of Taft’s stock up $19 Friday on the New York Stock Exchange, to a closing price of $151.50. Analysts said the runup reflects the market’s expectation that other bids may be forthcoming.

“We may be just seeing the beginning of all this,” said Geoffrey Johnson, analyst with Argus Research in Manhattan.

After completion of the pending sale of five troubled non-network television stations, the 28-year-old concern will own seven network-affiliated television stations and 15 radio stations, cable properties, a television program distribution firm and Taft Entertainment, which is based in Los Angeles. Taft Entertainment has about 700 employees and includes the Hollywood-based Hanna-Barbera animation concern, and other animation and live-action units.

Neither Bass, who holds about 25% of Taft’s 9.2 million common shares, nor Lindner, who holds 15%, would comment. The Bass-led investor group has four representatives on the 17-member board of directors.

The Taft family, whose prominent members have included President William Howard Taft and former Sen. Robert A. Taft Jr. (R-Ohio), owns about 12% of Taft Broadcasting stock with another well-known Ohio family, the Ingalls.

Jonathan Nelson, managing director of Narragansett Capital, said the investment company would provide $125 million as the equity portion of the deal. Other funds would come in bank borrowings and through sale of high-yield, high-risk “junk bonds,” he said.

Narragansett Capital, which specializes in leveraged buyouts, owns KOVR-TV in Sacramento, radio stations and cable properties.

The bidders have asked Taft’s board for a response by March 12.

In an interview with the Cincinnati Post, Taft said the bidders had offered a “solid price” for the shares.

The company’s recent financial problems have been largely a result of the weakness of the non-network, or independent, television station business. Such stations have suffered from a soft advertising market and the high price of original programming. After a lengthy search to find buyers for its five troubled stations, Taft Broadcasting announced last year they would be sold to TVX Corp., a tiny Virginia Beach, Va. firm, for $240 million.

That price was $100 million less than the value Taft had been carrying for the stations on its books.

For the nine-month period that ended last Dec. 31, Taft lost $54.4 million on revenue of $143.4 million.

In the past year, it has also sold an amusement park near Toronto for $65 million, and its 47.3% stake in the Philadelphia Phillies baseball team for $24.1 million.

TAFT BROADCASTING AT A GLANCE Owns 12 TV stations (five are being sold) and eight AM and nine FM radio stations, a Los Angeles entertainment division that includes Hann-Barbera Productions and Sunn Classic Pictures, and a leisure properties division that includes theme parks in five states and Canada. About 60% of revenue comes from broadcasting. Taft also owns 50% of a joint venture that is buying Wometco Cable for $620 million.

Year ended Mar. 31 1986 1985 1984 Revenue (millions) $473 $375 $454 Net income (millions) 19.4 48.5 38.2

9 mos. ended Dec. 31 1986 1985 Revenue (millions) $403 $365 Net income (loss) (millions) (46.5) 33.2

Assets: $334 million Employees: 2,300 Shares outstanding: 9.2 million 12-month price range: $90.00-$151.00 Friday close (NYSE): $151.50, $19.00